LCH.Clearnet S.A. Notice - T+2 settlement cycle migration - Penalty charge amendments

Report date

Wed, 01/10/2014

Summary

Date	01 October 2014
To	To All S.A. Equities Clearing Members

Body

On the 6th October 2014, 26 markets will migrate from a T+3 to a T+2 settlement cycle for cash equities.

LCH.Clearnet S.A. (LCH.Clearnet) conducted extensive consultation with market participants on the potential market impacts from migrating to T+2, in particular how LCH.Clearnet could support a smooth and orderly transition for clearing members as they adjust to the new shortened settlement system.

To that effect, LCH.Clearnet will implement a temporary change to the cash equities penalty regime specified under Article 15 of the SSR.

From 8th October 2014 – 14th October 2014 LCH.Clearnet S.A. will reduce the fixed fee penalty described in Article 7 of this instruction from 15 € to 1,5 € for Net Fails due to lack of delivery. Any other provisions of this Instruction remain applicable.

During this pre and post migration period, LCH.Clearnet will continue to apply fines relating to prior outstanding T+3 failed settlements and the Buy-In process will not change.

LCH.Clearnet will monitor the settlement discipline closely and provide clearing members with full assistance to ensure continued market efficiency.

LCH.Clearnet Ltd and LCH.Clearnet S.A. have carried out a joint approach to the penalty charge amendment consultations to simplify the process for members of both entities. To view the LCH.Clearnet Ltd member notice please click here.

Kind regards,

Christelle Girard – Head of Cash Equities (SA) - LCH.Clearnet SA